Financial Manager

Financial managers

Financial Managers

Name

University Name

1 a ) Identify the various sources of finance available to a business

There are two ways through which a business can finance itself , on a short term basis and long term . Short term sources are those which include bank overdrafts , bank loans , having better working capital leasing and availing the trade credits . Leasing , particularly operating lease is classified as a short term source of finance . Operating lease is in which the lease period is less than the asset 's useful life . It is

br short of a rental arrangement

Long term finance is done through various different ways . One of it is equity method . By equity method it means ownership in the business through ordinary shares only . Preference shares are not considered to be a part of equity source of finance . Right issue is another way how finance can be raised but to the existing shareholders only . Through equity method shareholders get a control over the business and can influence decision made by the business

Debt is another source of long term finance . Loan notes , debentures and bonds are considered to be the sources classified under debt financing Loan notes can be redeemable as well as irredeemable . Mostly debts have to be paid a certain amount of interest as well as principal . In case of irredeemable debts they are not be paid on a specific time in future but the interest is paid

Another way of raising long term finance is through convertibles Convertibles...